BlackBerry on Monday abandoned hopes of finding a buyer, and instead pegged its future on a $1 billion cash infusion and new management, after the sudden departure of its chief executive. 

The Waterloo, Ontario-based company’s announcement comes nearly three months after its largest shareholder Fairfax Financial Holdings Inc. offered to buy the rest of the business and take it private.

Fairfax instead announced it will invest $1 billion in a private placement, and Fairfax boss Prem Watsa will be lead director of BlackBerry.

BlackBerry chief executive Thorsten Heins meanwhile will step down after only one year on the job, and will be replaced on an interim basis by John Chen, a statement said.

“Today’s announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors,” said Barbara Stymiest, chair of BlackBerry’s board.

BlackBerry had announced in August after a dismal year that it was looking for a suitor, among other strategic options.

Social network website Facebook, Chinese computer maker Lenovo and investment firm Cerberus backed by two BlackBerry founders and chip maker Qualcomm Inc. reportedly kicked the tires, but no deals were reached by today’s deadline.

This outcome, said Stymiest, was deemed “in the best interests of BlackBerry and its constituents, including its shareholders,” some of whom are suing the company in a class action, alleging its optimistic sales forecasts for its new smartphones cost them hundreds of millions of dollars.

Chen, a former head of the software firm Sybase, said he looked forward to steering BlackBerry through its “turnaround and business model transformation,” but asked for patience.

“BlackBerry is an iconic brand with enormous potential — but it’s going to take time, discipline and tough decisions to reclaim our success,” he said.

BlackBerry helped create a culture of mobile users glued to smartphones, but lost its luster as many have since moved to iPhones or devices using Google’s Android software.

Some analysts have said BlackBerry has fallen so far behind competitors that its only hope is a breakup, which could salvage its software and services operations.

Technology analyst Jeff Kagan said Monday: “There are so many questions right now surrounding BlackBerry.”

“Will Blackberry survive? If so, what will they look like and will they be successful?” he added. “Right now there are no real answers for Blackberry. That is a very uncomfortable place to be for investors, customers, workers and partners.”

In January, BlackBerry unveiled a new platform as it sought to regain lost momentum, but its most recent numbers suggest this has been a spectacular failure.

BlackBerry still has some 70 million subscribers worldwide, but most of these are using older handsets, with the newer devices on the BlackBerry 10 platform failing to gain traction.

The company recently announced that it was laying off 4,500 staff — or one third of its global workforce — after losing $965 million in its last quarter as sales plummeted.

For its money, Fairfax is buying debt convertible into 16 percent of BlackBerry’s outstanding common shares, adding to the 10 percent it already owns.

The transaction is expected to be completed within the next two weeks, pending regulatory approval.

source: khaleejtimes